Glassnode Says 31.2% of Bitcoin Supply Has Exposed Public Keys, Creating Potential Quantum-Attack Risk

About 31% of Bitcoin’s circulating supply is held in addresses with exposed public keys, according to an analysis.

On October 8, Glassnode co-founder Rafael Schultze-Kraft said about 6.26 million Bitcoin are held in addresses whose public keys are visible on the blockchain. That amounts to 31.2% of the circulating supply. The share is up 6.4 percentage points from 24.8% in early 2021.

A public key is used to verify a Bitcoin transaction signature. It differs from a private key, which gives its holder the authority to move assets. Under current cryptographic systems, deriving a private key from a public key is difficult. The core of the potential risk is that a sufficiently powerful quantum computer could reverse that process.

The biggest source of exposure was address reuse, which accounted for about 4.33 million Bitcoin. When an address whose public key has been revealed during a transaction is used again, any remaining or newly received assets are linked to the same public key. Another 1.94 million Bitcoin were held in transaction structures such as P2PK and Taproot, where public keys are directly exposed.

Among exchange holdings, about 1.79 million Bitcoin had exposed public keys. That was 57% of the Bitcoin Glassnode identified as being held by exchanges, up 2 percentage points from 55% in May this year.